H-1B News -- Filing Fee Increase, Neufeld Memo

August 2010 is shaping up to be one of the toughest months for H-1B employers. In the last few days, we have a seen a targeted H-1B filing fee increase and the dismissal of a lawsuit that sought to overturn the Neufeld Memorandum.

Fraud Fee Increase

Late last week, the House and Senate quickly passed a massive H-1B and L-1 filing fee increase. The increase was instantly signed by the President.

Effectively immediately, H-1B and L-1 employers with more than 50 employees and who have workforces with 50% H-1B or L-1 workers, will see an increased fraud fee on new petitions. Previously, the fraud fee was $500. The new L-1 fraud fee will be $2,750 and the new H-1B fraud fee will be $2,500.

New petitions are a Beneficiary’s first L-1 or H-1B visa for a Petitioner. Typically, new Petitions are when the Beneficiary is (i) a new hire from overseas or from another nonimmigrant visa status, (ii) a student ending their OPT, or (iii) an L-1 or H-1B transfer from another L-1 or H-1B employer.
The fraud fee does not apply to employees’ L-1 or H-1B extensions since these are not "new" filings.

Neufeld Memo Lawsuit Dismissed

Earlier this summer a consortium of recruiting and staffing companies sued the USCIS, contending that the Neufeld Memorandum was contrary to law. On Friday, a federal Judge dismissed the case. The Judge's opinion says that the Neufeld Memorandum is legally permissible because the Memorandum is simply “guidance” and not binding on USCIS officers. The Plaintiffs had hoped that the federal Judge would force the USCIS to withdraw the Neufeld Memorandum.

The Neufeld Memorandum limits approvals of H-1Bs where the Beneficiary is employed at a third-party worksite. In the Neufeld Memorandum, the USCIS decreed that many staffing relationships are barred from using the H-1B visa program because staffing companies are not “employers”.

The Memorandum derisively referred to the IT staffing model as a “job shop”. USCIS Officers have used the spirit of the Neufeld Memorandum to attack heretofore acceptable and approvable staffing models.

MU has seen much stricter evaluations in third-party worksite situations. Although we have not seen a material rise in denials, we have seen more RFEs issued in many H-1B cases where the employee is set to work at a third-party worksite.